B-1✦1995ArthurAndersen&Co.S.C.,Allrightsreserved.CustomerNeedsAnalysisForBusinessProcessReengineeringManagementBriefingARTHURANDERSENWhatdoIreallyneed?B-2✦1995ArthurAndersen&Co.S.C.,Allrightsreserved.ArthurAndersen’sresearchintoBestPracticesInCustomerSatisfactionprovidesinsightintohowleadingcompaniesarebuildingloyalandprofitablecustomerrelationships.Today,wewilldiscusshowthesecompaniesaregainingamorecompetitiveunderstandingoftheircustomer’sprioritiesandwherethecompanyshouldfocusonimprovingperformance.ArthurAndersen’sresearchintoBestPracticesInCustomerSatisfactionprovidesinsightintohowleadingcompaniesarebuildingloyalandprofitablecustomerrelationships.Today,wewilldiscusshowthesecompaniesaregainingamorecompetitiveunderstandingoftheircustomer’sprioritiesandwherethecompanyshouldfocusonimprovingperformance.Today’sObjectivesB-3✦1995ArthurAndersen&Co.S.C.,Allrightsreserved.TopicalOutline⇒WhyAssessCustomerNeeds?⇒SegmentingTheMarket⇒CustomerInterviews⇒TheCustomerSurvey⇒BreakthroughWorkshops⇒FocusingChangeInitiativesB-4✦1995ArthurAndersen&Co.S.C.,Allrightsreserved.BottomLineImpactOfCustomerSatisfaction■IBMDivision:ForEach1%IncreaseInCustomerSatisfaction=$257MillionRevenueOpportunity■Chrysler:HighSatisfactionDealersSpend1/4OnAdvertisingPerCarSold■AmericanExpress:RetainingExistingCustomersCost1/15ofReplacementB-5✦1995ArthurAndersen&Co.S.C.,Allrightsreserved.ExistingCustomersBecomeMoreProfitableEachYearSource:HarvardBusinessReview,Sept/Oct1990,Reichheld&SasserProfitGeneratedByAverageCustomerOver5YearsIndustrialDistributionYear12345$4599121144168B-6✦1995ArthurAndersen&Co.S.C.,Allrightsreserved.ReducingCustomerDefectionsBy5%IncreasesProfitabilityFrom35to95%Source:FortuneMagazine,Aut/Winter1993,Bain&Co.*Calculatedbycomparingthenetpresentvaluesoftheprofitstreamsfortheaveragecustomerlifeatcurrentdefectionrateswiththenetpresentvaluesoftheprofitstreamsfortheaveragecustomerlifeat5%lowerdefectionrates.AdvertisingBranchPublishingHome/AutoAutoCreditInsuranceOfficeBldg.SoftwaredepositsinsuranceservicecardbrokerageManagement818575504035958584IndustryGroup%IncreaseInCustomerValue*B-7✦1995ArthurAndersen&Co.S.C.,Allrightsreserved.WhyCustomersBecomeMoreProfitableOverTimeIncreasedPurchases:AmericanExpressfoundthat43%ofhighlysatisfiedcustomerswouldusetheircreditcardmoreoftenbasedupontheirpositiveexperience.AcquisitionCost:TheU.S.OfficeofConsumerAffairsestimatesitcostsfivetimesmoretoattractnewcustomersthantoretainaoldcustomers.PricePremium:PIMSstudyfoundhighcustomersatisfactioncompaniescharge9percentmorethanpoorcustomersatisfactioncompanies.Referrals:OneleadingU.S.homebuilderfoundover60%ofitssalesresultfromreferrals.Conversely,aTARPstudyfoundthattheaveragedissatisfiedcustomerwilltell9to10othersabouttheexperience.ReducedOperatingCosts:Intheinsuranceindustry,a5%increaseincustomerretentionlowersthecostperpolicyby18%.CustomerExperienceCycleFirstTimeRepeatAdvocateB-8✦1995ArthurAndersen&Co.S.C.,Allrightsreserved.CaveatEmptor:KnowThePointOfDiminishingReturnsDisneyResorts:“MakeTheCustomer’sDreamsComeTrue”❿Traditionofexceedingcustomer’sexpectations❿Waschangingbedlinenseverynight❿Conductedin-roomsurveyaskingifeverythirdnightok?❿After22,000guest-nights,only2requestedeverynight❿$Millionssavedplusreducedenvironmentalimpact❿Traditionofexceedingcustomer’sexpectations❿Waschangingbedlin...
